Our Ref: JA0198WSD
25 August 1998

The Honourable TUNG Chee Hwa
The Chief Executive of the
Hong Kong Special Administrative Region
Central Government Offices
Lower Albert Road
Hong Kong

Dear Sir,

Consultancy Study on the Private Sector Participation in the Provision of Water Supply Services

We learnt from the Special Notice issued by the Director of the Water Supplies Department on 30 June this year that the Government would commission a consultancy study on the feasibility of private sector participation in the provision of water supply services in the form of privatization, corporatisation and other options. Upon learning the Notice, most of the staff members of the Water Supplies Department (WSD) have plunged into a state of anxiety and frustration, subsequently undermining their working morale and performance as a whole. This reaction is not only attributable to the scepticism on the part of the staff towards the actual causes and motivations behind this study, but also to our concern for any jeopardy brought about by the study on the employment and future of all employees. So far, the Administration has not made any specific statements of commitment or assurance.

Operating under the constraint of inadequate resources within the WSD, the staff of the Department have always been able to maintain a reasonable level of service for the community. In our quest for further enhancement of quality, efficiency and cost-effectiveness of our service, we will continue to identify areas for improvement and undertake measures to achieve the goal.

Let us review some of the notorious incidents in the provision of public service that have far-reaching effects on the community for the past year or so. The inadequacies of privatization, franchise operation, corporatisation and sub-contracting are manifested in the high level of fare maintained by the Western Harbour Crossing, chaos in the new airport, the reluctance of the China Motor Bus Company to improve their service and the improper management of the Hong Kong Stadium. With the exception of a more competitive level of fees, a comparison of the above-mentioned management modes with the management of the Government illustrates that they are not better than Government departments in terms of quality of service, efficiency, the standard in management, and inadequacies in respect of accountability, the right of public knowledge, entrepreneur conscience and the commitment for the benefits of the community as a whole.

With the continuous negative growth in the economy and an all-time high unemployment rate, Hong Kong is experiencing a period of unprecedented difficulties. While we are facing a situation in which our major trades and professions are suffering from deficits and losses, the Government is still proceeding with the consultancy study. This is obviously a reversal of priorities and a waste of efforts and resources. The Government is seeking fundamental changes in a long-standing and efficiency-proven water supply service which is essential to the livelihood of the people in the territory, replacing it with risky management without any guarantee of success. As members of the public, we cannot comprehend the rationale behind such an action and will not support the changes.

The consultancy study could lead to increases in fees and break our rice-bowls. However, since the announcement of such a study, the Government so far has not put forward any commitment of job security and assurance of employment to affected employees. As members of the staff of the WSD, we have done our best, we have devoted the golden days of our lives to our work, have contributed our fair share to the major achievements of the Department. In the light of this unfair, unjust and unethical move of the Government, how can we refrain ourselves from raising objection? How can we stop ourselves from comparing the Government with large corporations and consortia that have recently laid off staff on fabricated excuses in order to achieve maximum profits? That*s why we are voicing our demands for employment and job security.

Furthermore, in order to bring about a smooth reunification of Hong Kong with China, the Central Government of the People*s Republic of China had reassured the public servants of Hong Kong that they may retain their status with their posts, benefits and conditions of service no less favourable than the level under the British rule. It has only been a year after the reunification, and the Government of the Special Administrative Region has already proposed major changes to the future of the staff of the WSD. This move is a deviation from the undertaking the Central Government has committed on the international level. As part of the civil service, we would not accept any deprivation of our basic rights.

In consideration of the overall benefits of the community and our lawful rights as employees, members of the related unions and associations of the WSD would like to make the following declaration to the Chief Executive so as to clarify our position on the matter:

As Hong Kong is undergoing a time of economic recession and high unemployment rate, members of the related unions and associations of the WSD do not consider this an appropriate time to conduct the consultancy study on private sector participation in the provision of water supply service. Without the monitoring from the staff of the WSD, we strongly object to the hasty decision on the part of the Government to conduct the study, which is a waste of limited resources. Since the study has far reaching and significant impact on the job security of the staff of WSD as well as the livelihood of the community as a whole, we petition the Government for a deferment of the study so that the stability and peacefulness of the community will not be upset, while the job security and morale of the staff of WSD will not be adversely affected.

With best wishes from

Poon Chung-hei
Waterworks Inspectors' Association

Chan See-chi
Association of Water Meter Reading Staff

Tsang Ge-ping
Customers Services Inspectors' Association

Tam Wing-tai
Government Waterworks Professionals Assn

Suen Ming-fung
Hong Kong Water Supplies Department Employee Union
cc: Secretary for Works
Director of Water Supplies
Secretary for the Civil Service
Mr Tam Yiu-chung, Chairman of the LegCo Panel on Public Service

(Letterhead of the Works Bureau)

Our Ref.: (19) in AP 33/05 II

Alliance of Staff Union of Water Supplies Department
Kowloon Branch Office,
Rm 207, 128 Sai Yee Street,
Mongkok, Kowloon.

Mr Poon Chung-hei,
Chairman, Waterworks Inspectors' Association

Mr Chan See-chi,
Chairman, Association of Water Meter Reading Staff

Tsang Ge-ping ,
Chairman, Customers Services Inspectors' Association

Tam Wing-tai,
Chairman, Government Waterworks Professionals Assn

Suen Ming-fung,
Chairman, Hong Kong Water Supplies Department Employee Union

17 September 1998

Dear Chairmen,

Re: Consultancy study on private sector participation in the provision of water supplies services

You Alliance has written a letter dated 25 August to the Chief Executive on the captioned subject, copies of which were sent to Secretary for Works, Secretary for Civil Service, Director of Water Supplies and Mr Tam Yiu-chung, Chairman of the Legco Panel on Public Service. I have been authorized to reply on behalf of the Chief Executive.

Although we understand your concern and position on this matter, we hope you would understand that it has been the established practice of the Government to identify all feasible ways of enhancing productivity and service standard. In order to improve the efficiency of water supplies service, the Government plans to commission a consultancy study on possible ways of private sector participation in the provision of water supplies services. The study is only a preliminary study. Upon completion of the said study, the Government would consider the recommendations contained in the report, and may commission further studies on some of the recommendations. The Government would consider the findings of the study very carefully before making decisions on the feasibility and level of private sector participation. Therefore, at the present stage, it is really not necessary for you to speculate either on the findings of the consultancy study or possible problems that may arise from the re-arrangement of work of staff members.

The Water Supplies Department had written to various pertinent staff unions on 26 June and had held respective special meetings to give briefings and collect relevant opinions on the subject. If the Government really decides to launch the private sector participation scheme, the possible impact on the employment prospects of staff members will depend a lot on circumstances of individual cases. If redundancy occurs as a result of implementing the private sector participation scheme, the Government would, as an established policy, try hard to identify Government posts for those who wish to continue serving in the civil service. Before formulating any plan, the Government would definitely consult affected staff and discuss details of future arrangements and terms of services with pertinent staff members and unions. Enclosed please find a copy of Civil Service Bureau (formerly Civil Service Branch) Circular No. 26/91 for your reference.

It is hoped that the above points would address your concern.

Yours sincerely,

(LAU Kwok-choi)
for Secretary for Works

Encl.: Civil Service Bureau Circular No. 26/91

cc: Personal Secretary of the Chief Executive
Secretary for the Civil Service
Director of Water Supplies
Mr Tam Yiu-chung, Chairman of the LegCo Panel on Public Service